Resigned to the fact that crude was hogging the spotlight Wednesday, September natural gas futures puttered around within an 11-cent range ahead of their expiration Friday.

The prompt month climbed for most of the morning and peaked at $5.38 as of 10:31 a.m. (EDT) before deciding to give the small gains back, and then some, for the remainder of the afternoon. September natural gas futures closed at $5.298, down 4 cents, while the October contract fell 4.3 cents to settle at $5.432.

While natural gas took a nap Wednesday, the real news was in the crude futures market, where the October contract continued its decline due to talk that the U.S. may be preparing to tap the Strategic Petroleum Reserve (SPR). October crude futures closed down $1.74 at $43.47/bbl for the session.

“I think the natural gas market is suffering from a lack of participation, mainly because of the time of year,” said Steve Blair of Rafferty Technical Research in New York City. “I think there are two things that are going to happen for the remainder of this week and next week. A lot of people up here are taking last chance [summer] vacations; and also you have the Republican National Convention here next week, so people might be trying to take vacation to stay out of the city.”

Blair added that the natural gas market for the moment appears to be butting up against near-term support levels. “I really don’t think much is going to happen until storage comes out [Thursday],” he said. “The first line of support area in the $5.29-5.30 level was broken Tuesday, and we bounced off of it. We are now staying right around that area. I think a break of $5.20 could probably see a move down to $5, but I am not so sure that is likely without a really big storage number. Otherwise I think this market might do a little bit of congestion. I think it is just going to congest a little bit and not really make any big moves in either direction.”

With the political rumor mill ramping up to full tilt ahead of the presidential election, the oil market was abuzz with talk that the Bush administration is considering the release of oil inventory from the SPR to try to quiet public concerns related to high oil prices.

“Frankly, I don’t think that is in the cards,” said Blair, noting that Bush “is completely against that. If the crude market is reacting to that [rumor], it’s a false reaction in my opinion. I just can’t believe that anybody who knows this market would believe that Bush would release SPR.”

Turning attention to the Energy Information Administration’s natural gas storage report Thursday morning, Blair said he was looking for an injection in the 80s Bcf, noting, “That’s huge for this time of year.” He added that if the market continues to see such sizeable injections as August comes to a close, consumers are going to be “really happy.”

Tim Evans of IFR Energy Services said the injection to be revealed Thursday has a lot to do with whether losses from the fire at Duke’s Moss Bluff, TX storage facility show up this week. If the losses make last week’s survey, then Evans said he is looking for net injections in the 65-75 Bcf range. If not, he believes the 80 Bcf market consensus may be closer to the truth. “In any case, refills would have to fall below the 55 Bcf five-year average to produce even a single supportive week’s worth of data, something that has happened just four times since the end of February,” Evans said.

Taking into account the possibility of Moss Bluff losses, Citigroup’s Kyle Cooper is calling for a build between 78 and 88 Bcf. The actual injection revealed will go up against last year’s 53 Bcf injection and a five-year average build of 55 Bcf.

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